RURAL communities in the Yorkshire Dales will no longer benefit from cheaper fuel after blundering tax officials withdrew a discount given to two garages in error.

HMRC has written to filling stations in Aysgarth and Woodhall in Wensleydale advising that they should not have been accepted onto the rural fuel tax duty rebate scheme.

The European Commission initiative allows garages in the most rural parts of the country to knock up to 5p a litre off the price of petrol and diesel.

Aysgarth Garage and Woodhall Garage both applied for the discount after it was announced earlier this year.

Both garages - along with the petrol station in Hawes - were accepted, however HMRC has now told Aysgarth and Woodhall it made a mistake and they should not have been included because they were not within the postal town of Hawes.

It appears the mistake came to light after Bridge Garage in Bainbridge queried why it was not eligible for the discount when it was closer to Hawes than the other two petrol stations.

Mark Oyston, owner of Aysgarth Garage, is furious about the error.

He said: "It's a complete cock-up - these are people's livelihoods we're talking about.

"I'm not going to let it drop. The Government should be helping small businesses not hindering them."

Mr Oyston has contacted Richmond MP Rishi Sunak about the mistake.

The MP criticised the HMRC for its "gross mishandling" of the scheme.

He added: “Having held an emergency meeting with Treasury Minister Damian Hinds MP – who holds overall responsibility for the scheme – I have been informed that an administrative error led to HMRC accidentally providing a number of ineligible garages with the rebate.

"To his credit, the Minister personally expressed his deep regret for the confusion and disruption HMRC’s error has caused to local businesses.

“I have been assured that affected garages will be permitted to retain the rebate for a 30-day grace period and that HMRC will be launching an internal investigation as to how this error came about."

Mr Sunak said he would be taking the issue up in Europe to examine the the possibility of extending the scheme beyond Hawes.

In a letter to the garages, HMRC apologises for the error and reassures the petrol stations it will not be seeking to reclaim any payments given out as part of the scheme.